Thoughts on Appraisal Management, REO and Real Estate Tech

Aaron Roaf

Recent Posts

Working with a proven AMC partner will mitigate much of the risk for lenders as the appraisal industry continues to add more appraisers into the market. In evaluating potential AMC partners, lenders should consider whether the AMC:

There are two current trends that are tied to appraisal-related problems within the industry: The first relates to ongoing challenges with obtaining appraisal reports in a timely fashion in certain states; and the second has to do with an expected reduction in refinance business, which will require mortgage lenders to strengthen their purchase money origination networks

We’ve shared a lot of news and information on this blog about the recent acquisition of InsideValuation by LRES and the new valuation products that are now available as a result. These products have caused a lot of excitement among LRES customers because they provide an affordable method of obtaining as-is market values for both commercial and residential real estate.

Real estate valuation is a critical component of the lending process, but it’s very important for business loans. Many community banks and credit unions would like to build deeper relationships with the businesses operating in their markets, but they need an affordable method of valuing the collateral and assessing the risk. LRES' added line of new real estate valuation products and other company’s offerings, now enables them to offer an effective solution to these institutions.

Because all mortgage lenders are subject to the same rules and regulations, even if the agencies that oversee them are different, it’s easy to assume that they are all on a level playing field. Actually, that’s not the case. Larger lenders that drive higher loan origination volume find it easier to find good partners, advisers and lower pricing. Meanwhile, smaller institutions face significant challenges here. The problems they face stem primarily from the foreclosure crisis and the new compliance oversight that resulted from it.

We work with professional real estate appraisers all across the country. These experts are trained to look at more than just the structure of a single-family residence when they provide an opinion of value for use in the mortgage lending transaction. We often think first about comparable transactions, square footage, age of the home and its general condition, but there are many more factors that appraisers consider when completing their reports.

Reverse mortgage loans have overcome some initial market resistance, thanks to a great deal of proactive education provided by the industry, and are now increasing in popularity. These home finance products are attractive to senior citizens who have equity in their homes and want to supplement their income. The Home Equity Conversion Mortgage (HECM) is insured by the U.S. Federal Government and only available through an FHA-approved lender.

For many lenders, the right time to hire a good Appraisal Management Company came a few years ago, when federal regulators began looking more closely at the collateral valuation process. Some say it started with the New York Attorney General’s investigation that led to the Home Valuation Code of Conduct. From our perspective, the writing was on the wall long before that and what HVCC did was rightfully demand an arms-length relationship to the lender and property to validate the valuation process. HVCC ran its course and was replaced by other industry rules and regulations that today help ensure that collateral risk is managed properly, for the lender and the borrower’s sake.